U.S. Senator Amy Klobuchar today announced that legislation she supported to prevent student loan interest rates from doubling for more than 200,000 Minnesota students has passed the Senate and will now head to the President's desk to be signed into law. On July 1, interest rates on federally subsidized Stafford student loans will double from 3.4% to 6.8%, costing Minnesota students hundreds of dollars in increased interest payments unless Congress takes action. The proposal will prevent the rate hike and help keep college more affordable for students.
"I've heard from students across Minnesota who say the rising costs of higher education are putting a strain on their families and making college seem out of reach for young people, and burdening students with hundreds of dollars in additional debt is simply unacceptable," Klobuchar said."This legislation will block the rate hike and help keep college more affordable for students in Minnesota and across the country, and I'm pleased that Democrats and Republicans came together to pass this important bill."
Subsidized Stafford loans are low-interest loans for eligible students to help cover the cost of higher education at a four-year college or university, community college, or trade, career, and technical school. If the interest rate is allowed to double, it could cost borrowers who take out the maximum $23,000 in subsidized Stafford loans an additional $5,200 over a 10-year repayment period and $11,300 over a 20-year repayment period.